European Market Infrastructure Regulation
Under the European Market Infrastructure Regulation (“EMIR”), all counterparties are required to report details of any derivative contract they have concluded, or which the counterparty has modified or terminated.
EMIR requirements involve:
EMIR requires all market participants to report details of all derivative contracts (interest rate swaps, FX, credit, equity and commodity) to TRs.
Different from MiFIR reporting, EMIR requires any collateral transferred, between two counterparties to a transaction, to be reported in EMIR Trade Reports. Collateral can be reported on 2 bases and also broken down into 3 types. Click here to see detailed information with examples to help you understand.
EMIR applies to any entity established in the European Union (“EU”) that has entered into a derivative contract, and applies indirectly to non-EU counterparties trading with EU parties. EMIR recognises two (2) main counterparties to a derivatives contract:
All counterparties that enter into derivative trades will need to have a Legal Entity Identifier (“LEI”) in order to meet reporting obligations.
An LEI is a 20-character code that uniquely identifies entities who participate on the financial markets.
All reports require a Classification of Financial Instrument (“CFI”) Code. The CFI is a six-character code used to classify a financial instrument, as defined in ISO 10962.
Financial and non-financial firms trading in derivatives must report details of all derivatives trades via a TR. This includes all the details of trades and any event thereafter that affects the valuation or the terms of the trade. It also includes identification of the country of the counterparty (country of incorporation for legal entities, country of residence for natural persons). EMIR covers OTC derivatives and exchange-traded derivatives.
Any derivative contract is required to be reported under EMIR reporting requirements, and includes:
The definition of a derivative contract is based on the Markets in Financial Instruments Directive (“MiFID”).
Reports are required to be submitted to a registered TR no later than one working day after the trade has been made (T+1).
In November 2017, the revised Regulatory Technical Standards (“RTS”) and Implementing Technical Standards (“ITS”) began to apply. The changes made by the RTS and ITS to EMIR include addition of reportable instrument classes, increase in the number of reporting fields, changes to collateral reporting and introduction of the requirement to report CFI codes.
You are required to report all details of a derivative contract as well as any modification or termination of the contract. Depending on how our client’s system works, TRAction has 3 different reporting methods ready to be tailored to our clients’ needs.
We’ve identified 9 of the most common mistakes that investment firms make in their EMIR reporting. Find out what these mistakes are and get it right from the start with our simple tips.
Firms that use TRAction for their EMIR reporting find they save time and money in complying with their regulatory requirements. We would be happy to talk to you about how we can help to simplify your EMIR reporting requirements, contact us on +44 20 8050 1317 in the UK or +61 2 8960 7248 in Australia.
TRAction provides clients with delegated reporting solutions in accordance with the reporting requirements outlined above.
Our clients can also conduct regular check of our service quality. Visit our Regular Quality Checks page to find out how you can be assured that we are doing a great job for you.
In the midst of an unprecedented global crisis, CME Group has announced its closure of most of its regulatory reporting services including NEX Regulatory Reporting and the CME European Trade Repository by 30 November 2020. We understand the stress and inconvenience this may bring to CME’s existing clients in terms of switching to another TR, ARM or reporting delegate.
If you are currently a client of the CME’s regulatory reporting entities, TRAction is here to help you and ensure a smooth transition of reporting services on or before 30 November 2020. Click here to find out more.
MiFID II extends the derivative transaction reporting obligations of MiFID to a larger group of businesses. Read More
Find out more about the requirements for Australian OTC derivatives reporting under the ASIC regime. Read More
Find out more about the requirements for Singaporean OTC derivatives reporting under the MAS regime. Read More
Find out more about the requirements for Hong Kong OTC derivatives reporting under the HKMA regime. Read More